In December, Alipay, China’s leading e-payments service and a business of Ant Financial Services Group, announced a partnership with Wirecard, the global electronic payments group for merchants, offering Chinese users the ability to pay with their smartphone and Alipay app at authorised POS retailers in Europe.

PaymentEye spoke to Rita Liu, Head of Europe, Alipay about the partnership, the opportunities presented by Chinese tourism and the future of e-commerce and cash.

You’ve recently partnered with Wirecard to provide mobile payment services to Chinese tourists travelling in Europe, how big an opportunity is this for Europe to engage with the Chinese market?

According to the World Tourism Organisation, the Chinese tourism market is worth $164 billion, so we have been working with partners all across Europe to provide merchants the opportunity to benefit from this market, by integrating Alipay.

Wirecard is a major player in the global mobile payments space, offering POS infrastructure, payment processing and acquiring services, so this is a great partnership for us that means we can reach thousands of Chinese tourists who are shopping in Europe. In Wirecard, we have found a strong and flexible partner. Our plan is to enable an easy rollout of our payment and value-added services solution to various merchants in Europe, to capitalise on the Chinese market.

When expanding into territories such as Europe, what considerations did the company have to bear in mind in terms of cultural differences, regulators and people’s payments behaviour?

Alipay is China’s leading e-payment solution, and aimed at Chinese consumers. So, when expanding into new territories such as Europe, the considerations are really around understanding where Chinese tourists go, what they buy, and how we can add value to them when they are in Europe.

On the whole, China’s adoption of mobile payments is much higher than Europe’s, as consumers use Alipay in all their daily lives – not just shopping, for example, paying for utility bills, paying for cabs, booking tickets, etc. This is something we would like to bring to Europe, so our customers can benefit from Alipay outside China.

From a European retailer’s perspective, in order to succeed in attracting Chinese customers they need to ensure they understand what and how they are buying online and tailor their services to meet that of the Chinese consumers online shopping behaviour. One of the most important considerations is the way Chinese consumers want to pay for their products – familiarity, flexibility and trust are key.

With Alipay having 400 million active users and an 80 per cent share of the mobile market in China, what is the country’s attitude to cash as a payment method?

In China, consumers generally prefer to use mobile payments as opposed to cash, a trend we’re seeing- especially with the younger generation. China is making the shift from cash to cashless far more rapidly than any other country, largely as a result of rapid urbanisation and the availability of e-cash options in China. There are various reasons for this, some of which include the rise in counterfeit cash, and the fact that cash itself is also unhygienic.

Various retailers in China actually prefer all payments to be made via mobile and online, so they can provide a better customer experience by tracking customer behaviour.

This year’s Singles Day was the biggest yet, whilst in the UK Black Friday was dominated by online sales – is e-commerce the future of retail, or will physical stores still be relevant in the next decade?

We believe physical stores will absolutely still be relevant, but it’s the cross channel experience that will be really important to customers. Consumers crave familiarity, flexibility, convenience and trust so using a system that works for both on and offline will have a positive effect on consumer purchasing and brand loyalty. On December 12, Alipay initiated the Double 12 Alipay Carnival, where over 28 million Alipay users enjoyed discounts when they paid with Alipay at offline merchants, including supermarkets, convenient stores and restaurants. It is a good example to showcase how Alipay facilitates offline payment and how offline merchants can benefit from mobile payments.

When Alipay was first launched in 2004 it was originally to address the trust issue between buyers and sellers for ecommerce transactions. The Alipay mobile app, enables us to roll out to instore environment as we wanted to provide customers with a holistic experience from online to offline. From an industry perspective, the O2O, or “online to offline”, market in China is forecast to grow 63 per cent between 2015 and 2017 to RMB42bn (£4.2bn) according to Credit Suisse.

What crucial things can the UK payments market learn from the Chinese market in terms of innovation and implementation?

Making the best use of the data that you glean from customer data is key to innovation. The usage of data to improve both customer service, and product innovation is much more prevalent in China, and defines how we can engage with our customers.